Sam Laird Chief, Research, Division for International Trade, UNCTAD

1. What does the WTO do for the the Developing Countries?Leverhulme Lecture, Nottingham 22 April 2002 Sam Laird Chief, Research, Division for International Trade, UNCTAD WTO and Development

2. Overview • Developing countries in the GATT • Development issues in the WTO • Lessons from Seattle • Trade and trade policy developments • The « Doha Development Agenda » WTO and Development

3. The ITO and the GATT • The Havana Charter 1947 • Chapters on employment and economic activity, economic development and reconstructions, restrictive business practices, intergovernmental commodity agreements, and the establishment of the ITO • ICITO & the GATT • Development reforms in the GATT • 1954-55 – Article XVIII, Article XVIII bis • 1964 – Part IV • 1979 – the Enabling Clause WTO and Development

4. Key GATT ideas • Freer (not free) trade in goods through reciprocity in negotiations • Tariffs not NTBs • Non discrimination (MFN & national treatment) • But RTAs allowed, unilateral preferences under Enabling Clause and waivers (Cotonou, CBI, etc) • Rules for trade – progressive coverage of disciplines • Dispute settlement (consensus to accept) WTO and Development

5. GATT to the WTO • Establishment of new organization, 1995 • Inclusion of services and intellectual property • Revised dispute settlement mechanism • Unified, consensus to reject, Appeal Body • Single undertaking • New market-access commitments in goods & services • Revised rules WTO and Development

6. Seattle - 1 • Organizational problems • Text too long, too ambitious • Need to include TA and LDC measures? • Were all “Trade and…” issues ripe for deal (investment, competition policy)? • Should all issues be in WTO (environment, labour standards)? WTO and Development

7. Seattle - 2 • Implementation problems • Where is the cheque? • Barriers loaded against developing countries • Backloading • Contingency protection • Need for TA, longer transition periods WTO and Development

8. Seattle - 3 • Change in membership • 80 CPs in Punta del Este, 135 Members in Seattle (143 in Doha) • Increased complexity of WTO • Most WTO Members now in RTAs • Did they try hard enough? WTO and Development

9. Seattle - 4 • Two conflicts of vision about WTO • WTO as key legal framework for intergovernmental economic relations, protector of rights, rules of law • Trade negotiations as a cooperative game • Consensus rule-making (veto>vote) • WTO intrusive, secretive, undemocratic • lack of transparency • controversial DSM cases WTO and Development

10. The road from Seattle to Doha • Launching of mandated negotiations in agriculture & services - BIA • Mandated reviews of WTO agreements • LDC package – EBA, AGOA • Work on TA budget • Accessions – especially China • Transparency (internal cf external) WTO and Development

11. Addressing implementation concerns • Problems in implementation of UR results • Textiles, DSM, AD, GPA, TBT/SPS, TRIMs, TRIPS, RTAs • S&D issues • “Best endeavours” to take account of interests of developing countries • Operation of GSP – not an issue • Lesser obligations by developing countries and longer transition periods • Technical assistance • Special mechanism, committee work WTO and Development

12. Policy developments • Trade policy reforms in developing & transition economies in last 10-15 years • NTBs eliminated or reduced • Tariffs rationalized and cut to 10-20% • More to be done • Tariff peaks, escalation, growth of AD measures, licensing systems, local content plans, technical barriers • Protection bias against developing countries WTO and Development

13. Anti-dumping actions by Groups 1980-99 Source: WTO. WTO and Development

14. ISIC Description Aus EU Jpn NZ Nor Mex Tur CH USA 1 Agric., forestry & fishing 0.5 7.2 7.0 0.0 0.0 5.2 0.0 0.6 2.8 2 Mining & quarrying 0.0 6.7 0.4 0.0 0.0 24.5 0.0 0.0 0.4 21 - Coal mining n.a. 42.9 n.a. n.a. 0.0 0.0 n.a. 0.0 0.0 22 - Crude petroleum n.a. 0.0 n.a. n.a. 0.0 46.2 n.a. n.a. 0.0 23 - Metal ores n.a. 4.4 n.a. n.a. 0.0 0.0 n.a. n.a. 4.0 29 - Other n.a. 3.6 n.a. n.a. 0.0 0.0 n.a. 0.0 2.3 3 Manufacturing 1.7 5.4 2.5 0.0 0.9 12.9 0.3 0.1 8.1 31 - Food, bevs., tobacco 8.3 11.1 8.6 0.0 0.0 1.9 0.0 0.8 1.2 32 - Textiles & apparel 0.0 75.4 28.7 0.0 24.3 70.6 0.0 0.0 68.3 33 - Wood & wood prods 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 34 - Paper & paper prods 0.0 1.9 0.0 0.0 0.0 0.0 0.1 0.0 1.3 35 - Chem. & pet. prods 0.6 1.6 1.4 0.2 3.7 3.8 0.0 0.0 3.2 36 - Non-metallic min. prods 0.5 0.0 0.0 0.0 0.0 0.4 6.6 0.0 6.1 37 - Basic metal industries 0.0 0.6 2.6 0.0 0.0 36.5 0.1 0.0 30.4 38 - Fabricated metals 0.2 0.0 0.0 0.0 0.0 15.1 0.0 0.0 6.1 39 - Other 0.0 0.0 0.0 0.0 0.2 31.9 0.0 0.0 1.7 Total 1.5 5.6 2.8 0.0 0.4 11.8 0.2 0.1 7.2 NTBs in OECD - by major sector 1996 WTO and Development Source: UNCTAD TRAINS Database.

15. Trade developments • Developing countries share of world trade highly variable • 33% in 1947, 20% in 1973, 28% in 1999 • Countries which have diversified to manufactures have generally done better • Decline of 2 percentage points following Asian, Russian, Brazilian crises, but strong recovery • Few trade policy reversals WTO and Development

16. Doha – The New Agenda • Extended market access - potential gains • BIA - Agriculture - $70bn, Services - $300bn? • PLUS - Manufactures - $70bn – added at Doha • Other immediate negotiations • AD, subsidies, environment • New negotiations in 2003? Subject to consensus • investment, competition policy, transparency in government procurement, trade facilitation • Further study • electronic commerce • S&D provisions, technical assistance WTO and Development

17. Doha – Other parts of the deal • TRIPS • Subsidies • Implementation • Cotonou Agreement • Bananas • Labour standards - ILO business WTO and Development

18. Issues: To what extent does WTO system contribute to economic development? • Promotion of good policy: • Transparency, Tariff reduction & binding, elim. of QRs, licencing TBT/SPS, state trading, RTAs • GATS, agriculture, textiles (at last?!) • BUT: AD/CV, BOP. Subsidies? Safeguards? TRIPS? • Significant direct implementation costs: • Customs valuation, AD/CV, TRIPS, TBT/SPS, textiles • Significant investment (indirect) costs: • Customs valuation, GATS, TRIPS, TBT/SPS WTO and Development

19. Issues: To what extent does trade contribute to economic development? • Linkages between investment, trade and growth plus debt and poverty • Effects on income distribution, wages and employment • Need for social safety nets, structural adjustment programmes WTO and Development

20. Development links with some specific issues • Other issues • Environment • TRIPS • DSM • Trade and … issues • TBT/SPS • RTAs WTO and Development

21. Is Doha a time bomb? • Development issues – now a top priority • Genuine concern or fear of stalemate in WTO? • Is a development friendly outcome of the DDA guaranteed? • What is the future of S&D treatment? • More enforceability? Greater differentiation? Issue-oriented treatment? More “policy space”? • Regionalism and/or multilateralism? WTO and Development